Melamchi’s Italian contractor defaults projects in Kenya as well

Published On: March 16, 2019 09:25 AM NPT By: Republica  | @RepublicaNepal

KATHMANDU, March 16: Two Kenyan dam projects are thrown into uncertainty like Nepal’s Melamchi project, undertaken by Italian contractor Cooperativa Muratori & Cementisti di Ravenna (CMC). 

The Melamchi contractor that is on the brink of bankruptcy in Italy has landed into a corruption scandal in Kenya, while its alleged corruption in Nepal remains to be investigated. 

Government of Nepal terminated the civil works contract of Melamchi project two months ago after the contractor did not respond to the government’s call and remained absent from the project site for weeks. 

The contractor had won contracts of two multi-purpose dam projects in Kenya, but its ability to complete the projects is uncertain as it has filed for bankruptcy in an Italian court last year, according to Kenyan newspapers. 

Bankruptcy was also the reason behind the contractor’s walkout from Melamchi project. There is also an alleged corruption charge on Minister for Water Supply Bina Magar and erstwhile Water Secretary Gajendra Thakur, who was transferred from the ministry after dispute with the minister. 

According to media reports of Kenya, payment to the contractor by Kenyan authorities is being investigated, which was made for purchase of goods not necessary for the dam projects. 

The treasury officers of Kenya are being interrogated by anti-graft bodies. The firm is at the center of bribery allegations, says the Daily Nation, Kenyan newspaper, in its report published recently.

Kenya’s Directorate of Criminal Investigations, the agency for investigating complex cases, has started to examine how the billions of shillings paid to an Italian firm by the national treasury for the construction of Arror and Kamwerer dams was shared among politicians, according to the news report. 

The payment of Kenyan Shilling 7 billion (US $70 million) was first paid to the Italian contractor, but ten percent of the amount was rerouted to Kenya via London and withdrawn from a Kenyan bank in US dollar, the newspaper has reported. 

The contractor is also allegedly embroiled in corruption in Nepal led by transferred secretary 

Gajendra Thakur. Speaking at the federal parliament on February 22, lawmaker Gagan Thapa referred the statements of secretary Thakur blaming the minister for the delay in the project’s re-tender process. Thapa also claimed there was corruption behind this. 

Minister Magar has simply denied the charges, but she wants to re-award the project to the same contractor. 

According to privy sources, the minister’s unusual move is backed by business interests of Nepali suppliers and vendors of Melamchi projects as they are yet to be paid. 

Indecision on the dream project supplying 170 million liter water per day lingers for over eight weeks now.

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